People can’t afford homes. Is that Jerome Powell’s fault?
With housing prices still remaining out of reach for many would-be buyers, Gov. Ron DeSantis says values are being propped up by interest rates, with the Federal Reserve artificially constraining the market.
“Lower interest rates would generate more home sales, but as the below post points out, it may accelerate a decline in home prices,” DeSantis said, referring to an X link that suggested sellers will “panic” if the rates drop and their homes still didn’t move.
“The higher rates are inhibiting price discovery and the median home price is way out of whack with median household income,” DeSantis added.
DeSantis also suggested that today’s interest rates, which range between 4.25% and 4.5%, are keeping older homeowners from selling out and moving somewhere smaller, amplifying a suggestion that a “benefit of lower interest rates is that they would also allow seniors to downsize.”
Interestingly, DeSantis also had complaints in 2023, when rates ranged between 4.75% and 5%.
He quibbled with the Fed having “put rates to zero” after the federal government “printed trillions and trillions of dollars.” After that, he said “hiking rates very rapidly” ended up “causing dislocations in the banking sector.”
Closer to home, DeSantis signed legislation last year allowing much higher interest rates on consumer finance loans, boosting that number to 36% a year under some circumstances. That measure was among the final bills he signed in June 2024.
It’s uncertain if that vig drove or inhibited “price discovery” for those who needed the loans.
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